Pursuant to the Staggers Act, the Sierra Railroad obtained an exemption from the Interstate Commerce Commission (ICC) that permitted it to abandon a one-mile segment of its rail line without going through the regular procedures. Prior to granting the exemption, ICC published a notice in the Federal Register, alerting the public of filing deadlines for petitions to stay or to reconsider the exemption. ICC also sent notices to numerous State agencies, including the California State Historic Preservation Officer (SHPO). No objections were filed within the prescribed deadlines.

Over one year after the notice of exemption was published, Friends of Sierra Railroad, a group interested in preserving the line for public use, became aware of the abandonment and contacted the Advisory Council on Historic Preservation. The Council informed ICC that the abandoned segment of the line was eligible for the National Register of Historic Places and, therefore, that ICC had violated Section 106 of the National Historic Preservation Act (NHPA) when it exempted the railroad abandonment without undergoing the Section 106 process. The railroad preservation group subsequently filed a motion to reopen the proceedings and a petition for reconsideration, both of which ICC denied. The group then petitioned for review of the ICC action in the Ninth Circuit.

In deciding whether it had jurisdiction to hear the challenges to the abandonment, the court of appeals first determined that it did not have jurisdiction to review the original ICC order that granted the exemption and allowed the abandonment because the group had not petitioned for review of the final order within the 60-day time limit. 881 F.2d at 666. Even though it had filed a petition to reopen the proceedings, the court explained, an unsuccessful petition to reopen could not create a new final order that gives the court jurisdiction over an untimely petition for review. Next, the court determined whether it could review ICC's denial of the petition to reopen the proceedings and the petition for reconsideration. In setting forth the standard for reviewing such refusals, the court stated that even if the ICC order were erroneous, review was appropriate only if the petition was based on new evidence or changed circumstances. Id. (citing ICC v. Brotherhood of Locomotive Engineers, 482 U.S. 270, 284 (1987)).

Petitioners argued that new evidence existed because ICC's notice of exemption failed to disclose that the railroad line was eligible for the National Register and that the State of California could purchase the line. The court rejected this argument, stating that that information was available when the Federal Register notice was published and, therefore, was not new evidence but merely newly raised evidence. Id. at 667. Moreover, the court determined that publication of the notice of exemption constituted sufficient notice to the public of the abandonment proceeding.

The court also rejected petitioners' claim that new evidence and changed circumstances existed as a result of a subsequent D.C. Circuit decision which invalidated ICC's exempt abandonment procedures. The court of appeals reasoned that petitioners could have challenged the validity of those proceedings when the notice of exemption was published. The court found that the proceedings could not be reopened or reconsidered even if the decision involved material error. Finding it lacked jurisdiction to hear the matter, the court of appeals dismissed the case.